South Africa Country Risk Report

About This Report

Abstract:

Many issues threaten South Africa s political stability over the long term, not least the social and economic inequalities that stem from the apartheid era. Although our core scenario envisages no major change to the political backdrop, we present a number of alternative scenarios. ...In particular, threats stem from the high levels of poverty and inequality that prevail in spite of the relative affluence of the nation as a whole. threats And challenges to Stability South Africa faces several challenges, some of which are long- standing, and some of which have become more pressing in recent times: Legacy Of Apartheid: The policy of racial segregation enforced by the National Party between ---- and ---- has left a lasting legacy in South Africa, with the minority ethnic whites (-.- of the population) retaining disproportionate influence over finan- cial and business affairs, compared with ethnic black Africans (--.- of the population). Although the degree of skewing is difficult to estimate, the data certainly suggest that income distribution is very uneven across the country. ...However, it has arguably exacerbated racial tensions through advantaging the previously disadvantaged and disadvantaging the previously advantaged. Furthermore, it has created a brain drain effect, whereby white professionals go abroad to seek opportunities in countries where they may be hired more easily.

...However, this support may wane over time, given the economic hardship that many South Africans continue to suffer in the aftermath of the ---- recession. Importantly, some people feel that the government is insufficiently sym- pathetic with its policies. ...At the May ---- elections, the Democratic Alliance (DA) won --.- of all votes. SOUTH AFRICA Q- ---- Long-term Political risk index South Africa s long-term political risk index score of --.- out of --- reflects the country s position as one of the most stable in the long-term in Sub-Saharan Africa (ninth out of -- states). However, within this score there are significant variations with regard to the various subcategories. ...

...The decline of the African National Congress opens a political space for the realignment of post-Apartheid politics. A new labour federation led by the National Union of Metalworkers of South Africa and the Eco- nomic Freedom Fighters seems likely, which will not be market-friendly. ...However, diplomatic controversies are not a major concern for the African National Congress (ANC), which is more preoccupied with its eroding support base. While the ANC has governed since ---- and man- aged to receive -- of the votes at the May ---- election, the Nkandla scandal, which saw President Zuma accused of fund- ing home improvements at the taxpayer s expense, has harmed perceptions of the ANC at a time when dissatisfaction is running high, due to endemic poverty and inequality. Furthermore, the Tripartite Alliance (comprising the ANC, the Communist Party and the Congress of South African Trade Unions) is crumbling. ...

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